Terra started burning LUNA, why its goal is $140

Terra (LUNA) has soared in the past week after a period of integration, as the network has started to consume the supply of its native tokens. As of press time, LUNA is trading at $51.16, and the daily chart is down 5%.

LUNA shows signs of recovery on the 4-hour chart. source: LUNAUSDT transaction view

Related Reading | Why the Terra Ecosystem postponed major mainnet upgrades in late September

Yesterday, before Bitcoin and major cryptocurrencies fell back from all-time highs, LUNA began to break upwards and seemed to be preparing to break the resistance level of $54.

However, this rebound was disrupted by a lightning crash, and LUNA was rejected near the middle area near the current level.

This rebound seems to be driven by 3 major upgrades on the Terra mainnet. As NewsBTC reported 3 weeks ago, the network is ready to introduce Colombus-5 and Wormhole v2 through an inter-blockchain communication (IBC) protocol upgrade.

The first of these 3 improvements, COL-5, aims to implement a deflationary mechanism for LUNA. In addition, this upgrade is designed to improve Terra’s interoperability.

In the past year, tokens with a burning supply system have greatly appreciated. For example, Binance Coin (BNB) rose from a low of $50 and reached a historical high of more than $600.

Ethereum and its recently integrated EIP-1559 is another example. The network has changed its fee model, and each transaction consumes a portion of ETH.

LUNA may follow a similar path, using US$80 as LUNA’s potential and reasonable target in the short term, but it may further rise by more than US$100 and become one of the best performing companies with Solana (SOL) in 2021.

Investor Daniel Cheung has always been very optimistic about Terra (LUNA) and its ecosystem because it may disrupt the stablecoin industry. When starting the combustion mechanism, Zhang said:

The $LUNA paper is being staged; the target price of $140 is still maintained in the short term. In the long run, given that the TAM of stablecoins is unlimited, Terra is one of the few agreements that may reach the trillion-dollar market value range.

Terra (LUNA) started its moon phase?

As Bitcoin trades sideways after the crash, the altcoin market may take this opportunity to weaken BTC’s dominance. For LUNA, this can be translated into price discovery.

Related Reading | Why Terra (LUNA) will reward users through a new community bounty program

In order to achieve this goal, LUNA must recover $54 and break the resistance at $56, with a potential short-term price target of $60. Cheung added that LUNA is likely to enter the top 10 market capitalization, the current stage of the bull market, and the fundamentals of the asset:

It is important to learn to shrink the chart. $LUNA and $SOL are amazing buying options here, the bullish structure is still very strong, and the story continues to get better here. The run is not over yet, and both will soon become parabolic. There is always a bid for the best assets.

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